There are many business surveys out there and most have questions, in some shape or form, that are applicable to the labour market. To generate a broader and deeper labour market indicator, Westpac compiles all the relevant indicators from these surveys into the proprietary Westpac Jobs Index.
With the release of the NAB monthly survey we can complete our Sep Jobs Index. The Index is based so the long run average equals 50. The Index firmed a little more in Sep, rising 1.1ppt to 49.1 in Aug. It has been on a general firming trend since the recent low of 44.8 in Apr 2013.
Westpac’s Jobs Index correctly indicated had been picking up in the pace of employment growth but something around 1½% rather than 2%yr pace the ABS originally estimated for the Aug Labour Force Survey. Our Jobs indictor was one reason, but not the only reason, that we thought something was seriously wrong in the Aug labour force survey.
We have since seen the ABS revise that employment growth pace down to a more respectable 1.4%yr in Aug and a moderation to 1.1%yr in Sep. The index is pointing to this pace picking up to around 2%yr by early 2015.
Doubtful. The Westpac Index is good for trend but a less precise predictor that the NAB business survey and it is signalling that we’re going nowhere fast:
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
